China signed a $1.4-billion agreement with Zambia and Tanzania on Thursday to modernise the TAZARA railway linking landlocked Zambia to the Indian Ocean.

The railway, financed by China in the 1970s to facilitate copper exports and fuel imports through Tanzania, remains a critical trade route and is widely seen as countering the U.S. and EU-backed Lobito Corridor - a route from Angola through Zambia to the Democratic Republic of Congo.

The agreement was signed during a visit to Zambia by Chinese Premier Li Qiang, the first such visit in 28 years, at a time when Africa's second largest copper producer is emerging from a financial crisis.

"We want to work with Zambia to advance the cause of modernisation," Li said during talks with Zambian President Hakainde Hichilema ahead of the signing.

A representative of China Railway Corporation said the works on the 1 860 km railway line will include the rehabilitation of stations, the track, tunnels, bridges and construction of other infrastructure along the corridor.

The revamp is expected to raise freight volumes on the line to 2.4-million tonnes annually from 100,000 tonnes currently.

Li's visit is part of a push to deepen China's presence in the copper-rich country as Europe and the US vie to be alternative benefactors now that Zambia's $13.4-billion debt is on a more sustainable repayment plan.

Hichilema expressed gratitude for China's role in Zambia's debt restructuring process. China is Zambia's largest official creditor, owed $5.7-billion, and Beijing is keen to highlight countries that are model members of President Xi Jinping's flagship Belt and Road infrastructure initiative.

On Monday, Zambia issued a licence to a joint venture with China's Fujian Xiang Xin Corporation (FJXX) to build a $1.1-billion crude oil refinery and energy complex, underscoring China's growing economic footprint in the country.

Chinese companies have invested about $6-billion in Zambia over the last two decades, data from the American Enterprise Institute shows, almost all in the metals sector.

China said that together with Tanzania and Zambia, the three countries would strengthen cooperation around the TAZARA railway and promote trade among African countries, according to a statement by the official Xinhua news agency.

They will support the implementation of China's policy of granting zero tariffs for African countries that have diplomatic relations with the country, "encourage the localisation of production and processing in Africa, and expand the exports of high-quality products to China."

They will promote the development of existing industrial parks and zones along the railway line and surrounding areas, the statement said.